Viewing posts categorised under: Italy

All about residence……..

By Gareth Horsfall
This article is published on: 17th March 2015

17.03.15

What are the issues facing some of you? One which raises its head periodically is the question of residency and tax residency in Italy.

Before I go into this I would like to look back for a moment at some very recent Italian past and reflect on why we are where we are today.

2012 was a turning point in Italian politics and the way that, we, as expats live and could continue to live in Italy. It was the start of the New Norm. (as I like to call it)

It started with the moment when Berlusconi was ousted as Premier and was swiflty followed by the non elected Mario Monti. What was once accepted as the norm suddenly went under the spotlight. This was seen most dramatically in new tax legislation imposed on domestic and foreign assets and incomes and the sudden drive to track down and prosecute tax offenders.

There was no longer the option to live between 2 residency’s, but the subject became much more matter of fact (see rules below for details). Taking residency, by definition, means you are subject to Italian tax law.

The law is clear, as follows:

An individual is considered resident for tax purposes if, for most of the calendar year (i.e. 183 days) is:
registered with the Registry of the Resident Population (Anagrafe)
or has his/her residence or his/her domicile in the territory of the Italian state, as defined by Section 43 of the Italian Civil code

According to Section 43 of the Italian Civil Code:

The place of residence is taken to be the place where the individual has habitual abode
The place of domicile is taken to be individual’s principal place of business and interests

In fact, residency has never been a choice. It has always been a matter of fact and a tax agency would always see it that way. If you spend the majority of time in Italy then you will be deemed tax resident as defined by the rules above.

The key as always is in the planning.
If you are a holiday home owner then you should rarely take residency if your clear intention is to maintain your principal residence elsewhere.

But if you want to enjoy Italy all year round and pay the lower rate of VAT on a property purchase, benefit from the good health care system, be able to buy a car here (non residents cannot purchase a car legally in Italy), and benefit from lower utility rates then residence is required and certain legal obligations apply.

As I always say, you will pay more tax by living in Italy versus other Northern European countries and the USA. How can we expect to pay the same for sunshine? !! But a rural life, for example, should see your costs fall.

Despite all this, and having lived in Italy for years, I can tell you that there are tax-reduction and financial planning strategies that can lighten the burden somewhat. I should know! I have fallen for every tax trap in the book and have had to pay the tax man for it. But failure to plan effectively in Italy, ultimately, sharpens the senses.

If you would like to contact me with a view to finding out more then feel free to do so so. We don’t charge fees at The Spectrum IFA group so you can feel secure that you won’t be out of pocket by seeking a little advice.

Inheritance Tax in Italy

By Gareth Horsfall
This article is published on: 14th January 2015

14.01.15

You may not be aware but from an Inheritance tax point of view, Italy is actually considered a bit of a fiscal paradise (after you have picked yourself up off the floor because I just called Italy a ‘fiscal paradise’, you might want to read on). If your estate or part of it is likely to be subject to Italian Inheritance Tax on your death then the latest developments could interest you.

Italian Inheritance tax law dates back to the Napoleonic period which requires parents, on death, to leave a major proportion of their wealth to their children instead of just their spouse.

At the moment Italy’s Inheritance tax works as follows:

* If the estate is passed to your spouse or relatives in a direct line (i.e children) then they are required to pay 4% on the value of the inheritance that exceeds € 1million.

* Brothers and sisters must pay 6% with an allowance of €100,000

* Other relatives must pay 8% but without any allowance.

Despite Italy having approximately 1.5 million people who are subject to Inheritance tax each year with a combined value of approximately €56 billion, the tax collection is relatively small due to the high allowances and also the fact that that ‘successione’ for a property is based on the catastale value, not the market value.

WHAT ARE THE PROPOSED CHANGES?
Italy, like most other countries, is in desperate need of cash and they naturally see inheritance tax as a way of increasing tax revenues. In addition, the EU is encouraging Italy to review the present system to bring it into line with other, ‘less financially rewarding’, European countries.

The ideas, which are just ideas at this stage, are as follows:

* For spouse and direct line relatives, to increase the taxable rate to 5%. But, reduce the non-taxable allowance from €1 million to €200,000.

* Whilst the taxable rate will rise from 6 to 8% for brothers and sisters, and the allowance will reduce to between €50,000 and €100,000.

* The rates for other relatives will likely increase to 8% without any allowance.

This means that a lot of people will now be caught in the Italian Inheritance tax trap whereas previously they might not have been. Although, it should be said, the rates are still quite low.

However, as part of any inheritance tax /succession planning that you may undertake you may want to look at ways in which you can hold any asset, in a more tax efficient way. The polizza assicurativa (or Life Assurance Bond) meets exactly that criteria.

Any money that you hold in one of these tax efficient accounts is completely free from Italian Inheritance tax and is kept outside of the estate when the value is calculated. The not so good news is that if the majority of your estate is in your property, unfortunately, this cannot be placed inside the tax protective structure. However any other invested/investable assets can be, generally, from €50,000 upwards.

One of the great advantages is that there is no upper limit to contributions. You can protect a large part of your estate from Italian Inheritance tax easily and with maximum flexibility to access the capital and any income from it during your lifetime. The other big advantage is that the monies (whilst held inside the account) are not subject to Italian income and capital gains tax.

Expats in Italy and bank accounts

By Gareth Horsfall
This article is published on: 13th January 2015

13.01.15

During the course of my many conversations, one particular issue comes up all too frequently which I thought I just have to write about. It is something which has been on my radar for some time now. Now the time has come.

What am I talking about?
I am referring to basic bank accounts that expats use in Italy, those bank accounts which were probably set up when you first moved to Italy, either because the person who you were buying a house from suggested you open an account at the same branch to make life easier, or you were referred to the local branch because most people used it, or someone knew someone who could open you an account when you may not have even been a resident at the time. I am sure these reasons may sound familiar to some of you.

But unfortunately, you are more than likely being charged an extremely high amount of bank charges for little to no service.

Monte Pashi di Siena;
Monte Paschi di Siena keeps coming up as the worst culprit, by a long stretch, but yet, seemingly used most frequently by the expats I meet. One person I met last week was paying 34 euros a quarter for the bank account and then on 210 euro transfers to another Italian bank account (a simple bonifico) a commission of 4.50 eur. (2% commission PHEW!).

I did not even get to see what they were paying for exchange rate conversions (the mind boggles) or transaction fees for taking money from the hole in the wall and other services.

I estimated the costs could be as high as 800 Euro a year.

But it is simply daylight robbery and too many of you could be getting ripped off (I have no better words for it I am afraid) because you think that ‘it is just not worth the hassle of changing’ or ‘they are all alike’ or ‘banking back home is much better’.

However, this is no longer the case. In the last few years, Italian banks have really started to compete for business and there are options available. If you are happy with internet banking, then that’s even better.

I personally use 2 banks (personal and business). My personal account is Fineco (who? I hear you say). Fineco! (part of the Unicredit group). I am VERY satisfied with the service they offer. It is an exceptionally well operated online bank and even won the Global Finance Award for Best bank in Italy in 2013. It is 100% online. Now, I imagine that you might be thinking, online – Italy – errr, not sure, I need to keep an account where I can talk with someone if things go wrong. But, for basic banking it operates very smoothly. And I have emailed them many times and got responses within 24 hours.

And the best part is, at the time of writing:

ZERO canone. In other words no monthly, quarterly or annual charges just for having an account. FREE withdrawals from ANY cash machine throughout the whole of Italy. FREE credit card cash withdrawals from any Unicredit machines in Italy (and there are many). ZERO cost bank transfers in Italy.

My other bank for the business is Banca Popolare del Commercio e dell’Industria. This does not mean much, but it is part of the larger UBI banca group network.

I chose this account at a branch as it is a business account and I need to speak with my bank Director from time to time, but otherwise I operate everything online.

I pay only 5 EUR a month for this account and 0.50 Eur to make bank transfers. I can also withdraw cash from the UBI Banca group bancomats for FREE. The account, in general, is more expensive than the Fineco account but it is a business account and it has to be expected.

However, there are other personal account options with similar cost structures to Fineco, such as Ingdirect, Webank, Chebanca or Hellobank.

A good comparison website is www.confrontaconti.it

My simple message is to pay some attention to your bank account in Italy if you have not done so for some time. It is not difficult to change or use accounts, as in the past. With basic Italian you can do it without any problems.

You could be making huge savings just through changing bank accounts. They are as easy to operate as online bank accounts abroad and if, in this person’s case, a saving of 800Eur a year can be made then I would think it is definitely worth it. Any savings made can compensate for the increased taxes in recent years!

Take some time and have a look at your old bank statements to see what charges you are paying and compare this on the web link above to find out how much you ‘could’ be paying.

Tax and residency in Italy

By Gareth Horsfall
This article is published on: 12th January 2015

No 1. Expat tax Grief

Not a week goes by these days, where I am not contacted by someone who has a question about their residency in Italy, and what that means for them fiscally. Either by people who are about to move to Italy or others who have already been living here for some time and want to become ‘in regola’.

The conversation then naturally flows into the minutiae of exactly what are the taxes that need to be paid in Italy.

So, I would write and explain those pesky taxes that apply to expats who have income being paid and/or assets held in other countries. It may act as a good guide for those who are thinking about, or in the process of, doing something about their Italian tax returns for 2014.

Where to start?
Well, firstly I start by confirming that, as a resident in Italy, you are subject to taxation on your worldwide assets and income (with some exceptions). That means that if you are a resident in Italy then you are required to declare your assets and income, wherever they might be located or generated in the world.

TAX ON INCOME
If you are in receipt of a pension income, for example, and it is being paid from a private pension provider overseas or a state pension, then that income has to be declared on your Italian tax return (nb. different rules apply to Government service pensions, where tax is generally deducted at source in the country of origin and there is no further requirement to report the income in Italy). If tax is deducted at source in the country of origin, the income must still be declared again in Italy. A tax credit will be given for the amount of tax paid in the country of origin (assuming that country has a double taxation agreement with Italy), but any difference between the tax rates in the country of origin and Italy will have to be paid.

It is a similar picture for income, generated from employment. This is a slightly more complicated issue that depends on many factors and, therefore, I shall not dwell on it here. If you have any questions in this area you can contact me on the details at the bottom of this page.

INVESTMENT INCOME AND CAPITAL GAINS
This is one area where Italy excels above other countries, in that its system of calculation is very simple. As of 1st July 2014, interest from savings, income from investments in the form of dividends and other income payments are taxed at a flat 26%. Capital gains tax is the same rate of 26%.

** Interest from Italian Government Bonds and Government Bonds from ‘white list’ countries is still taxed at 12.5% rather than 26%, as detailed above. This is another quirk of Italian tax law as this means it is more convenient, from a tax position, to invest in Government Bonds in Pakistan or Kazakhstan, than it is to buy corporate Bonds from Italian corporate giants ENI or Unicredit. **

PROPERTY OVERSEAS
Property which is located overseas is taxed in 2 ways. Firstly, there is the tax on the income and, secondly, a tax on the value of the property itself.

1. Income from property overseas.
Unlike rental property located in Italy, which is taxed at the rate of approx 23% depending on what kind of rental you operate, overseas income from property is added to your other income for the year and taxed at your highest rate of income tax.

There is one advantage to this, in that tax in the country of origin has to be applied to the income in the first instance. Therefore, the net income (after expenses) in the country of origin is added to your other income in Italy for the year. This can be quite useful if the property/ies are investment properties, the expenses are high, the country of origin allows multiple deductions and the net income position is low. However, as I have written before, if you are reliant on the income to live on, then a high net income position (before declaration in Italy) can result in a much lower net amount (after Italian tax) depending on the amount of other income you receive each year. Once your total income for the year moves above €28,000 you enter into the punishing 38% tax bracket in Italy.

This can prove to be a tax INEFFICIENT income-stream for those hoping to live in Italy by relying on income from property overseas.

2. The other tax is on the value of the property itself, which is 0.76% of the value.

However, value must be defined in this instance. For EU based properties, the value is the Italian cadastral equivalent. In the UK (the area I am most familiar with), that would be the council tax value NOT the market value. You will find that the market value will, in most cases, be more than the cadastral equivalent value.

In properties located outside the EU, the value for tax purposes is defined as the market value of the property ONLY where evidence cannot be provided of the purchase value of the property, in which case this would be used instead.

TAXES ON ASSETS
It would not be right that other assets escaped Scot free!

BANK ACCOUNTS AND DEPOSITS
A very simple to understand and acceptable €34.20 per annum is applied to each current account you own. However, from 2014 every deposit account that you own overseas with an ‘average’ balance of €5,000 in it, each calendar year, is taxed at the rate of 0.2% of the average balance throughout the year. This includes fixed deposits, short term cash deposits, CD’s etc. The charge is the equivalent of the ‘imposta da bollo’ which is applied to all Italian deposit accounts each year.

Lastly, we have the charge on other foreign-owned assets (IVAFE). This covers shares, bonds, funds, portfolio assets or most other types of assets that you may hold. The tax on these is 0.2% per annum, (from Jan 1st 2014) based on the valuation as of 31st December each year.

This guide is only meant to be a broad outline of the taxes that affect most expats. It is not a full tax list and does not take into account personal circumstances. It is intended to be a guideline to help you make the right decisions.

My experience over the last 4 years has been, in most cases, that expats will end up paying more by being resident in Italy (which most seem to accept as OK, for the lifestyle they can lead) but, there are often a number of financial planning opportunities, to protect, reduce, and avoid certain taxes, that few take advantage of.

If we haven’t discussed these already or if you would like an initial chat to discover whether any of those opportunities are open to you then please feel free to contact me. There are no fees for enquiries and consultations.

Le Tour de Finance ‘FORUM’ 2014 – Italy

By Gareth Horsfall
This article is published on: 14th October 2014

Join us in San Ginesio (Le Marche)
and Barga (Tuscany)

The Tour de Finance 2014 is back for its autumn tour and this time we are visiting the East coast of Italy and returning to Tuscany.

Every year we bring a group of financial experts on the road in Italy to talk directly to expats about the financial considerations and concerns that they are facing.

We will be returning on:

23rd October – Palazzo Morichelli D’Altemps San Ginesio, Le Marche

24th October – Nr Bagni di Lucca at La Cantina delle Pianacce (Ghivizzano)

www.lacantinadellepianacce.it

Arrival time: 10.30am for coffee, with start time at 11am. The Forum questions and answers is followed by a FREE buffet lunch, wine and an opportunity to meet your fellow expats.

What is the Forum?

No more powerpoint presentations and structured presentations!

The Forum events are designed to put the speakers on the spot and deliver the answers to the financial questions you need to know, rather than the information we think you should know.

You may be interested in knowing the answers to some of the following questions:

What are the likely implications of being a resident or non resident and living in Italy?
What are the benefits of being subject to Inheritance tax in Italy?
What are the Italian tax rates that my income is subject to?
With world financial markets rising and falling almost daily, how can I find a way to benefit from these movements without taking too much risk?
How can I gain more interest on my savings when bank rates are so low?
As the world economy limps on what can be done to make my money work better for me?

Questions will be asked for one hour before lunch so it is an opportunity to put the experts ‘on the spot’

The Panel of experts will include:

Richard Brown and Julian Hall:
BEST INVEST Leading UK Investment and financial planning firm with over £9 billion of assets under management.

Judith Ruddock:
STUDIO DEL GAIZO PICCHIONI Cross border tax specialists and commercialisti.

Andrew Lawford:
SEB LIFE INTERNATIONAL He will be facing questions about tax efficient savings vehicles for Italy and ways to potentially. reduce your Inheritance tax liabilties.

I hope you will register your attendance. And I hope that the FORUM event will avoid all the boredom of powerpoint presentations and make the morning much more interactive for you.

If you would like to register for this event then you can do so by sending your full contact details to info@spectrum-ifa.com or call Gareth Horsfall on 0039 333 6492356.

Tax Residency in Italy

By Gareth Horsfall
This article is published on: 22nd September 2014

Tax Residency is always one of those issues that raises it head in batches, from time to time.

So, I thought I should clarify the matter again.

Residency determines where you may or may not be located for tax purposes.

The notion that you can be resident in Italy but pay tax elsewhere is an outdated notion and one that should be forgotten.

RESIDENCY IS A MATTER OF FACT AND NOT ONE OF CHOICE.

Here are the facts as determined by Section 2 of the Italian Income Tax Code:

An individual is considered resident for tax purposes in Italy if, for most of the calendar year (183 days), you are:
* registered with the Registry of the Resident Population (Anagrafe).
* resident or domiciled in the territory of the Italian state, as defined by Section 43 of the Italian Civil code.

And, according to Section 43 of the Italian Civil code:
* Your place of residence is the place where you, the individual, have your habitual abode.
* your place of domicile is your principal place of business and social/family interests.

Employment income is considered ‘produced’ in Italy if the work activity (i.e. business) is performed on Italian territory (this also means internet activity that is carried out in Italy, even if the focus of the internet activity is in another country).

Italy has been quite vocal about trying to clamp down on people who are claiming residency in Italy (and using public services) but not submitting tax returns, and also those who are operating business activities in Italy but claiming residency for themselves, or the business, elsewhere.

In reality it would be hard for the authorities to track them down, but with the open exchange of information agreements between Italy, UK, Germany, France, Spain and now the USA, it is hard to imagine how computers will not, before long, be merely churning out lists of wrongdoers every week.

The better way is to plan your way around your residency and your respective tax authorities.

Make sure you get your residency options right first time. By this, I mean talk to the people who understand these issues, plan carefully in advance of taking residency in Italy or elsewhere and, ensure that you take advantage of the tax breaks available to you. Failing to do so can create burdensome Italian administrative headaches after the event.

In any case, we should remember the words of Benjamin Franklin who once said

“An ounce of prevention is worth a pound of cure”.

If you have any questions regarding your own residency or if you would like to try and plan your way around your residency in a more tax efficient manner then you can contact me.

Are you a resident in Italy and what taxes apply to you?

By Gareth Horsfall
This article is published on: 18th September 2014

Tax List

The conversation then naturally flows into the minutiae of exactly what are the taxes that need to be paid in Italy.

So, following on from last week’s E-zine about residency and how it is actually defined, I thought I would write and explain those pesky taxes that apply to expats who have income being paid and/or assets held in other countries. I will repeat this towards the end of the year when some of you may be finalising your tax positions for 2014, but it may act as a good guide for those who are thinking about, or in the process of, doing something about their Italian tax returns for 2014.

Where to start?

Well, firstly I start by confirming that, as a resident in Italy, you are subject to taxation on your worldwide assets and income (with some exceptions). That means that if you are a resident in Italy (see my blog post RESIDENT EVIL for details of residency), then you are required to declare your assets and income, wherever they might be located or generated in the world.

TAX ON INCOME

If you are in receipt of a pension income, for example, and it is being paid from a private pension provider overseas or a state pension, then that income has to be declared on your Italian tax return (nb. different rules apply to Government service pensions, where tax is generally deducted at source in the country of origin and there is no further requirement to report the income in Italy). If tax is deducted at source in the country of origin, the income must still be declared again in Italy. A tax credit will be given for the amount of tax paid in the country of origin (assuming that country has a double taxation agreement with Italy), but any difference between the tax rates in the country of origin and Italy will have to be paid.

INVESTMENT INCOME AND CAPITAL GAINS

This is one area where Italy excels above other countries, in that its system of calculation is very simple. As of 1st July 2014, interest from savings, income from investments in the form of dividends and other income payments are taxed at a flat 26%. Capital gains tax is the same rate of 26%.

PROPERTY OVERSEAS

Property which is located overseas is taxed in 2 ways. Firstly, there is the tax on the income and, secondly, a tax on the value of the property itself.

Income from property overseas.

Unlike rental property located in Italy, which is taxed at the rate of approx 23% depending on what kind of rental you operate, overseas income from property is added to your other income for the year and taxed at your highest rate of income tax.

This can prove to be a tax INEFFICIENT income-stream for those hoping to live in Italy by relying on income from property overseas.

The other tax is on the value of the property itself, which is 0.76% of the value.

In properties located outside the EU, the value for tax purposes is defined as the market value of the property ONLY where evidence cannot be provided of the purchase value of the property, in which case this would be used instead.

TAXES ON ASSETS

It would not be right that other assets escaped Scot free! (Talking of Scots, it will be interesting to see how the markets react tomorrow to the possible Independence vote of Scotland. I will be watching and reporting on events depending on the outcome)

BANK ACCOUNTS AND DEPOSITS

A very simple to understand and acceptable €34.20 per annum is applied to each bank account or deposit account that you own overseas with an ‘average’ balance of €10,000 in it, each calendar year. This includes fixed deposits, current accounts, short term cash deposits, CD’s etc. The charge is the equivalent of the ‘bollo’ which is applied to all Italian bank accounts each year.

This guide is only meant to be a broad outline of the taxes that affect most expats. It is not a full tax list and does not take into account personal circusmstances. It is intended to be a guideline to help you make the right decisions. My experience over the last 4 years has been, in most cases, that expats will end up paying more by being resident in Italy (which most seem to accept as OK) but, there are often a number of financial planning opportunities, to generate capital in more effective ways, that people are NOT taking advantage of.

If we haven’t discussed these already or if you would like an initial chat to discover whether any of those opportunities are open to you then you can contact me on the email address below or I can be reached on cell: 333 6492356. There are no fees for consultations.

How to protect yourself in uncertain times

By Spectrum IFA
This article is published on: 15th August 2014

Wealthy individuals have a lot more in common than just their wealth. Ambition, skill, patience, consistency and a strategic game plan are all vital to ensure success. Keeping an eye on the end goal and never giving up have been key to reaching greater heights.

Only a minority of the population become extremely rich, as the likes of Warren Buffet, Richard Branson or Paul Getty, but this does not mean that we can’t enjoy a comfortable lifestyle with luxuries and freedom.

World stock market performances over the last 60 years reveal that the enduring trend is up and it is evident that any sharp downward movements often coincided with world calamities. Even with the peaks and valleys, stock market performance over time still yields inflation-beating returns for those who remain loyal.

Despite this, investors are concerned about the fluctuating Gold price and negative impact of the mining and metal strikes in South Africa and the developing Russian/Ukraine crisis which is already a cause for alarm – Russia is now talking of disallowing air travel over its skies to the East thus hampering tourism, the lifeblood for many of the Asian Tiger’s economies.

Hearing the words ‘hang in there’ is not enough reassurance for those trying to save for retirement or financial independence. This in turn affects investors who feel the pinch whether it be through investment of stocks directly through their own portfolio comprising retirement annuities, pension plans, QROPS, unit trusts or any other long term investment products which are exposed to the share market.

The critical questions is …

“How you manage your income and investments to shield against market volatility?”
Well, there are basically two main strategies that need to be developed in order to provide an effective buffer against economic turmoil.

The first is effective management of income and the second is a well-structured investment strategy.

Effective Money Management
It is little wonder that rising interest rates cause such widespread concern when so many people and businesses are exposed to excessive debt. If you take an average small- to medium-size business owner, they will probably have an overdraft, two car leases, a home mortgage and perhaps credit card debt. In anyone’s book, this results in a big chunk of money to repay before the school fees have been paid or the life policy has been covered.

The first step to minimising the effects in uncertain economic times is to reduce debt. If you don’t have excessive debt, the impact of rising interest rates on your pocket will be negligible and it’s worth bearing in mind that if you have cash reserves, the higher rate will benefit you greatly.

Well-structured investment strategy
The consensus amongst investment experts is to advise individuals to construct an investment portfolio in order to take advantage of long term trends. If the long term structure of an investment portfolio is healthy, short term storms can be weathered.

The first defence against any volatility in the markets is diversification. What this means, is that investors need to ensure that their investment portfolio is structured in such a way that they have investments in different asset classes such as cash, bonds, property and equities.

Uncertainty and volatility are intrinsic to investment markets. For this reason, investment should be viewed as simply a means to having enough money to live the lifestyle that you would like to live.

An investment portfolio should remain unchanged during times of volatility, unless the factors upon which the construction process was based have changed.

Investors should not change a long term game plan based on short term volatility. Attempting to time the market based on short term movements only increases portfolio risk.

The best way to protect yourself from market volatility is to first reduce your risk, which can be achieved by reducing debt. By doing this, you will have a lot less to worry about if inflation forces interest rates up.

The next step is to ensure that your investment strategy has a long term view and a financial planner will be your best resource when setting up a long term portfolio.

If you realise from the above the importance of seeking proper professional financial advice involving risk classification and correct diversification, why not give me a call in order to facilitate a meeting where we can do this.

Precious metals and gold

By Spectrum IFA
This article is published on: 30th July 2014

Which of these has more value? Is there something better?

When it comes to hedging (protecting) against dollar debasement, few things have performed as well as gold. Having gold or unit trust gold funds could be said to be “preparing for the worst.”

Following the fairly recent global financial crisis, governments have adopted expansionary monetary policies by cutting interest rates and increasing the amount of money in circulation to keep their banks and indebted borrowers afloat. Even though the historical case for gold is strong and the price goes up, the raw supply and demand case for platinum and palladium might be even stronger.

Russia and South Africa currently hold 80% of the world’s platinum and palladium reserves and both are struggling to maintain output. In fact, global supply is becoming increasingly less as production declines in these two politically volatile countries. Strikes in South Africa have resulted in the loss of 550,000 ounces (14,174,761 grams) worth of production in the first quarter of this year. And the tensions along the Ukraine border threaten to trigger huge disruption in markets in Russia.

This instability in South Africa and Russia all but ensures that the platinum and palladium markets will see yet another supply deficit in 2014.

Regardless, demand continues to increase and is unlikely to come down soon. Primarily, these metals are used in catalytic converters, the mechanism in your car’s engine that helps reduce noxious gas output and helps to keep the air cleaner. As more and more cars hit the roads – particularly in developing nations – the demand for cleaner air looks set only to rise.

Do you have gold shares in your investment portfolio? Or Uranium or Platinum? Now is the time to look at exactly what assets make up your portfolio. After all, I am sure you want to cover all bases.

———————————————————————————————-

“The best time to invest is when you have money.

This is because history suggests it is not timing which matters, but time”

Sir John Templeton

Are you a retired expat in Italy or thinking of retiring to Italy?
By Spectrum IFA
This article is published on: 29th July 2014
If your answer is “yes”, Then this information is important to revisit or think about

Expat guide to Money Management

Part 1: Your money and the cost of living

Maybe you have already relocated to Italy, or are seriously considering doing so. There are many factors which come into play. And nothing is more striking than how the change in the cost of living may impact upon you.

Add to this, changes in other areas – for example climate, salary and social life – all of these will have an impact on a successful stay/move – but the most vital one is to make sure you have control over your living expenses.

Adjusting to how much things cost relative to what you are used to is a key part of expat life and forewarned is forearmed!. The World Bank conducted an exhaustive survey and in its report highlighted the fact that food, housing, energy and healthcare costs continue to account for as much as 89% of annual spending, regardless of your location. It’s therefore vital that your day-to-day financial planning takes this into account, regardless of whether you’re employed, self-employed, looking for work in your new location or even retired or retiring.

I have experienced this myself since moving to Italy, especially insofar as the delicious Italian cuisine is concerned. Fortunately my wife has tracked down a tailor to make my trousers larger, but now I have the added expense of having to employ a personal trainer, something I never thought about in my prior planning on moving to Italy!!

Calculate what you’ll need in advance

If you are planning a move, then you need to know how much money you will need in order to have an equivalent lifestyle to the one you currently have. Also, you will need to gauge comparisons in the housing market as to property prices and/or rentals depending on your “mode of habitat”.

A personal tip: You can do this on the internet by looking at housing agencies and rental companies but you will find, 99 times out of a 100, accommodation at much lower prices if you just come to Italy for that purpose. Our quest via the web was frustrating as most agents have virtually the same properties on their books. But by coming to Italy ourselves (Lucca) we visited a few smaller operations and came away with exactly what we wanted at a rental 30% less than we found on the internet.

And do not forget other “miscellaneous” expenses such as buying a car, removal costs and very high motor car insurance premiums which need to be paid up front – only 6 or 12 months in advance – no monthly payments – and that premiums will reduce yearly as your stay in Italy lengthens.

Consider medical insurance

Healthcare is “non-negotiable” even if you qualify for the Italian state medical protection. As was pointed out in the information regarding finding accommodation on the web, rates quoted are generally quite expensive, but by speaking to a “local” agent/broker (usually with the aid of a translator) much lower rates can be obtained. This also happened in our case.

Think of the small additions

Other additional living costs may include employing a driver or domestic staff where relevant, and joining certain clubs to participate in expat social or business life. And then there is the cost of maintaining assets based in your native country. If your house is let out, for example, management fees will need to be paid to a letting agent.

Book a financial review

Consult a wealth consultant/adviser who can talk you through the opportunities available as an expat and find out why you should book a financial planning review

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